James Reilly (Dublin North, Fine Gael)

I am pleased to have the opportunity to discuss the HSE national service plan for 2012 and our health reform priorities. My overriding commitment to the people is to introduce a better and more efficient health system which will have improved services for everyone. With this in mind, the Government and I are committed to introducing a single tier service that will deliver equal access to care based on need, not income. There will be a number of important stepping stones along the way and each will play a critical role in improving our health service in advance of the introduction of universal health insurance.

I wish to update the House on the HSE national service plan for 2012 and, in particular, to outline the steps taken by my Department and the executive to mitigate the impact of budget cuts on front-line services and to set out my health reform priorities for the year. The HSE plan, which I approved in January, sets out the health and personal social services that will be delivered by the executive within its current budget of €13.317 billion. This year will be the latest in a series of hugely challenging years for the health service. The €750 million savings target for 2012 follows savings of €1.75 billion over the past two years, giving a total of €2.5 billion. As I advised the Dáil recently, approval of the plan followed extensive work undertaken by my Department and the HSE, including a rigorous examination of budget allocations across the services aimed at minimising the impact on front-line services and identifying where efficiencies will be driven.

This is to ensure there will not be a straight line reduction in services. In other words, it is not business as usual.

The targets for service delivery set out in the plan are very demanding. The plan commits the HSE to minimising the impact on services by fast-tracking new, innovative and more efficient ways of using reduced resources. Reform initiatives set out in the plan include the development of proposals to protect the viability of community nursing home units and to increase the intermediate care capacity for older people, and I will continue to work with the Minister of State, Deputy Kathleen Lynch, on this; a significant strengthening of primary care services, including issuing GP visit cards to long-term illness claimants - the Minister of State, Deputy Róisín Shortall, and I will ensure the delivery of this significant step on the road to universal health insurance and free GP care for all; an additional €35 million to be targeted at improving child, adolescent and adult community mental health teams as well as suicide prevention and counselling services; a more tailored approach to disability services; commencement of the roll-out of the colorectal screening programme; and progression of the clinical care programmes, including the roll-out of a national chronic disease management programme for diabetes. This underscores our commitment to both prevention and chronic illness management, or secondary prevention as it is better known.

More than 2,000 people have retired since September and another 2,000 will have retired by the end of the month. This still leaves more than 100,000 people working in our health services. Planning on this issue began last year. Contingency plans continue to be refined to address the impact of retirements and to ensure patient safety and service at the front line. This will include measures under the public service agreement to achieve increased flexibility in regard to work practices and rosters, redeployment and other changes to achieve more efficient delivery of services. Some management structures and services will be amalgamated and streamlined and cross-over arrangements will be put in place wherever possible and where clinical management numbers have been reduced.

I have acknowledged that pressure points will emerge which, in fact, have already been identified by local hospital and community managers in the HSE and are now being worked on by the health transition team. The HSE is seeking to mitigate the impact of these retirements through targeted investment and recruitment. Some key posts will be filled and planned investment in this regard includes €20 million to enable the replacement of front-line primary care staff and €35 million in mental health for the recruitment of an additional 400 whole-time equivalents.

I intend to review the service plan once the full impact of staff leaving at the end of the 29 February grace period is known. I made it clear during the course of the national service plan statements in the Dáil that this will be a dynamic process. There will be a number of reviews and as the situation changes, we will modify the plan. The service plan is a key signpost, however, for how our health services will be delivered in 2012.

In addition, the programme for Government has set out a major agenda of reform of our health care system which will lead to universal health insurance. I have identified four key reform priorities for 2012: delivering on the special delivery unit agenda; further overhaul of health system governance; reforming the model of care; and reforming the health insurance sector.

First, significant reform of the acute hospital system is planned. Last year I established a special delivery unit to reduce waiting times for patients for both scheduled and unscheduled care. The special delivery unit has delivered on the two key priorities which I set for it in 2011. In the area of unscheduled care delivered in emergency departments, the cumulative number of patients waiting on trolleys at 8 a.m. across the country for the first 16 days of January 2012 was reduced by 27% compared with the same period last year. I am glad to say that reduction continues.

In regard to scheduled care, I directed that all public hospitals ensure they had no patients waiting more than 12 months by the end of 2011. The National Treatment Purchase Fund reported that at the end of 2011, only two hospitals, both in Galway - Merlin Park and University College Hospital Galway - had people waiting more than 12 months for treatment on the active list.

That compares with 28 hospitals at the end of 2010 that had patients waiting over 12 months. I recently announced new ambitious targets for scheduled and unscheduled care by the end of 2012 or earlier.

Another critical aspect of reform of the acute hospital system is implementation of a new, more efficient funding system for hospital care. Under a "money follows the patient" funding system, hospitals will be paid per patient seen. This is a more efficient financing mechanism which incentivises acute hospitals to treat more patients, an incentive absent from the current arrangements. To achieve this a number of initiatives are already under way including a patient level costing project, which involves tracing resources actually used by individual patients from the time of entry and admission to hospital until the time of discharge. The Health Service Executive has also implemented a pilot project in regard to prospective funding for certain elective orthopaedic procedures. That has yielded a saving of nearly €6 million in its first year. Where hip and knee orthopaedic procedures were being paid for under the money follows the patient system, the hospitals were reimbursed immediately on submission of the bill as long as the patient was admitted on the day of surgery. That had a dramatic effect in both Navan hospital, Cappagh hospital and elsewhere.

Further reform in the hospital sector will see public hospitals become independent, not for profit trusts. In progressing this, I recently announced my intention to organise every acute hospital into hospital groups. Each group will have a consolidated management team headed by a group chief executive with responsibility for performance and outcomes, operating within clearly defined budgets and employment limits. This initiative will build on the groups already announced in Galway and Limerick and ensure that the smaller hospitals are managed as part of a group, and that their role is protected. I have said time and again in the past that notwithstanding the difficulties we have had with removing some services from smaller hospitals because of safety concerns that is nothing to the row that will result when we start moving the less complex procedures from the bigger hospitals back to the smaller hospitals but we are determined to do it, and it will be done. The future of smaller hospitals is guaranteed.

It is clear that the system of health governance must be radically overhauled also. To this end, I will be bringing forward legislation to bring about significant changes in the governance of the HSE. The legislation will abolish the board of the HSE and replace the board structure with a directorate structure. This new governance structure will be a transitional arrangement, pending the eventual dissolution of the HSE as the health care reform programme advances.

In tandem with the proposed transitional governance structures, I intend to put in place new administrative arrangements for greater operational management focus on the delivery of key services. I believe that new arrangements will facilitate greater transparency, accountability and efficiency, and will be a key component in the move towards universal health insurance.

The strengthening of primary care planned in the programme for Government and the HSE National Service Plan 2012 reflects the need to move to new models of care across all service areas, which will treat patients at the lowest level of complexity that is safe, timely, efficient and as close to home as possible. An example of that is a focus on the provision, where appropriate, of intermediate care for older people rather than long-term residential care. In that respect I want to see a chain of intermediate care facilities across the country to ensure that nobody goes into long-term care from an acute hospital without having passed through the intermediate care assessment and had the best possible chance at recovery through convalescence and rehabilitation and a full assessment done as to how their needs are to be best met.

The reform agenda also involves enhancing and expanding our capacity in the primary care sector to deliver universal general practitioner care, with the removal of cost as a barrier to access for patients. This commitment will be achieved on a phased basis to allow for the recruitment of additional doctors, nurses and other primary care professionals. Taking this step will allow us to move away from the old hospital-centric model, where health care was episodic, reactive and fragmented, and to deliver a more proactive, joined-up approach to the management of our nation's health. A project team of officials from the Department and the HSE has been established to oversee the implementation of universal primary care. The project team held its first meeting on 24 January.

Under universal health insurance, everyone will be insured for health care and the current unfair discrimination between public and private patients will be removed. In the meantime, I am focusing on addressing the problems of the current private health insurance market where insurers have a considerable financial incentive to cover younger, better risks rather than older, poorer risks. I emphasise that the levy that was put in place in regard to achieving this goal is not about class but about young people supporting old people. That is what community rating is about and I believe it is supported by all Members of this House. It is important to point out, however, that this is the last year of that levy as full risk equalisation will come in with effect from 2013.

I am strongly committed to protecting community rating and within the next few months I will introduce legislation for a new risk equalisation scheme. This will ensure that a company such as VHI, which has the most of the older and less healthy customers, will be better able to compete on a level playing field. In the meantime an interim scheme of age-related tax credits and community rating levy has been in existence since 2009 and has been providing significant support to community rating. I extended the interim scheme for 2012, under the Health Insurance (Miscellaneous Provisions) Act 2011.

I have previously expressed my views on the VHI in the public arena on many occasions and the programme for Government provides for the VHI to remain in State ownership. For the benefit of clarity, the current position in respect of the VHI is that the Government has decided, on foot of my recommendations, that the VHI should make an application for authorisation by the Central Bank, subject to further Government decisions to be made relating to capitalisation. My Department and the VHI have been working for some time in preparation for this. When the foregoing fundamental building blocks are in place, we will be ready to proceed with the introduction of universal health insurance. This system will give patients a choice of health insurer and will guarantee that everyone has equal access to a comprehensive range of curative services.

The Government has recently given approval for an implementation group on universal health insurance. This group will assist in developing detailed and costed implementation plans for universal health insurance and will also help to drive the implementation of various elements of the reform programme. I have recently finalised details of the implementation group, which will be announced shortly, and the group will meet before the end of the month.

The HSE service plan 2012 is underpinned by the Government's requirement for reform, innovation and efficiency. The reforms that I am proposing are different from those tried before in a number of ways. They are comprehensive rather than incremental, they are led by innovation as opposed to dictated by resources and, most importantly, they are patient-focused instead of system-focused. The special delivery unit approach has succeeded in significantly improving services in regard to emergency departments and scheduled care. Equally, I was pleased to launch a new electronic GP referral initiative recently, on behalf of the national cancer control programme, for patients with lung, prostate and breast cancer. This simple, effective referral guarantees patients that they will see the first available expert in one of the eight cancer service centres - the one nearest to them - and that a record of the referral is made and available to them as well as a confirmation of their appointment. This will obviate the types of problems we had in Tallaght last year.

The commonality between these two improvements for patients has been that all the stakeholders have been involved. In the case of the special delivery unit, people on the front line came forward with innovative ideas, the special delivery unit did the analysis and the clinical programmes put in place the protocols to ensure they were safe. It delivered improvements in our trolley numbers; they are measurable and there for all to see. Similarly, the national cancer control programme, working with the Irish College of General Practitioners and with the IT providers, brought about the improvement of the electronic referral.

The reforms are working. We can see real evidence of progress. This proves that it is possible, even during these times of financial constraint, to drive improvements and ultimately to provide a health system that is more efficient, of higher quality and delivers better outcomes for our patients.

While we have made some progress, we have much more to do. We need to continue on the road we have taken. I am pleased that those who work in the health service have joined us in working toward this aim. The changes we have made which have primarily involved listening to them and what they have to say have given power back to the system and those on the front line a sense that they can in a real way influence the system that should be serving them to serve patients.